Interpreting trade-related CO2 emission transfers

Most industrialized countries are net importers of carbon emissions, that is, they release fewer emissions for the production of their total exported goods and services than the amount generated (by their trading partners) for producing their total imported goods and services. But what do such carbon trade-deficits imply in terms of global CO₂ emissions and the design of carbon trade-policies? Drawing on trade theory, this Perspective argues that a deeper understanding of these observed net emission transfers is required to assess how international trade affects global emissions and proposes a method to disentangle the underlying determinants of such transfers.